Approval of Comcast-NBC deal could require content deals with Apple

As the U.S. government looks to approve Comcast's acquisition of NBC Universal, the purchase could come with "significant conditions" to prevent Comcast from withholding TV and movie content from companies like Apple.

Federal regulators hope to conclude their review of the Comcast-NBC deal by the end of 2010, according to The Wall Street Journal. Neither the U.S. Justice Department nor the Federal Communications Commission are expected to block the $13.75 billion deal, because NBC Universal and cable provider Comcast are not direct competitors.

"Both agencies, however, are likely to impose significant conditions to prevent Comcast from withholding, or threatening to withhold, NBC Universal's programming from competitors, including companies that distribute TV shows and movies over the Internet, such as Apple Inc. and Netflix Inc., according to people familiar with the matter," the report said.

The government is concerned that Comcast, which serves video to cable customers through its On Demand channel as well as Fancast.com, could promote its own services over competing options, like Apple's iTunes. The report also said that a "net neutrality" condition could be a part of the deal, preventing Comcast from slowing access to services like iTunes.

The alleged conditions being discussed by federal regulators are said to be a major unresolved issue with Comcast executives. Officials with the cable provider have charged that the government should stay out of the "rapidly evolving" market.

The government's apparent interest in the online video market has been known for months, but Monday's report from the Journal is the first indication that the government could impose sanctions to prevent Comcast from withholding content from Apple's iTunes. Currently, the General Electric-owned NBC does not offer TV show rentals for the new Apple TV.

Currently, only shows from Fox and ABC are available for rent on the streaming-centric Apple TV. Apple has pushed the studios to allow 99 cent rentals, but NBC and CBS opted to pass on the proposed pricing.

Apple Chief Executive Steve Jobs was hopeful in September that the networks that chose not to participate would soon "see the light and get on board pretty fast." But executives with Warner Bros. said they find the 99 cent pricing to be too cheap.

99 cents is not cheap, its as expensive as current cable operators fees every month for their service, these idiots need to get it together or become the dinosaurs of the 21st century.

You take a an √* la carte service and compare it directly to package service based on what you think the average user would watch. The content owners get huge lump sums from networks, regardless of whether you watch TV or not. The networks get huge lump sums of money from advertisers from affiliates, regardless if you watch or not. The satellite and cable companies get huge lumps of money from their viewers each month.

There are times when viewing is down, but that is easily smoothed out by continued consistent paydays. With √* la carte service they will end up hurting all these guaranteed revenue streams in order to satisfy 99¬Ę rentals and $1.99 purchases. Comparing them to optical media sales and rentals is pointless because these shows these aren¬t sold √* la carte, and are only being released after the season is over and just before the new one starts off, not the night after they air.

Regardless of how inconvenient or annoying this is to the consumer, these companies have a right to protect their businesses, which is working on a very profitable model spanning more than half a century and guaranteeing profit, compared to those that think iTS TV Shows should be less money because they already paid for TV in some other medium. This will not be pretty and the consumer will suffer collateral damage by the time all of this is said and done.

We bought the Apple TV, loved the device, and ended up returning it. WHY? Because it is so hamstrung by the networks that we cannot rent all the shows we watch.

Our original plan was to drop to U-verse basic and rent the five shows we cannot get on the basic service. The problem? We have to BUY the shows and stream them to the Apple TV because of the lack of cooperation from the networks. We don't want to buy a TV show. What will we do with it afterwards? Basically it turns into a $2.00 rental for a single TV episode. No thanks.

We finally got tired of the nonsense. We cancelled our U-verse TV service, but kept the internet service. We got a small, powered antennae to pick up the local stations and then bought a refurb Mac Mini in addition to an EyeTV. Now we watch our shows on the internet or record them to our Mac Mini to watch later on (and YES, we fast forward through the commercials). Oh, we also have Netflix and Bittorrent as backups.

To be truthful, we spend about the same amount of time in front of the TV, but we save a bundle each month and in 6 months our Mac Mini / EyeTV will pay for itself.

I wish Apple the best of luck with the Apple TV (Google TV and Boxee as well), but until these networks (and the RIAA) learn to adapt to the rapidly coming future, these devices are going to have limited use.